Gold buy or sell | Is there an increase of gold rate in future?

June 18th, 2010| In India.

Gold buy or sell | Is there an increase of gold rate in future?

From 2001, the rates of gold had been changing and the gold ranges from Rs.3500-4000 for 10 grams. Now the present rate of 10 grams is Rs.18000. we can expect it to increase or decrease and we will see the reasons for the increase in rates.

Hedging:

World gold council tells that the demand for gold had been decreased in the last two years but the rates of gold are increasing. In the 2008-2009, the usage of gold is up to 850-900 tonnes and in the year 2009-2010, the usage dropped to 300 tonnes. There are many reasons for the increase in gold rates. There are two types for gold, i.e. usage and investment. When there is increase in currency, equity markets and when the dollar rate decreases gold is bought as hedging. The gold rate is increasing as the dollar rate is increasing with respect to Euro. Finance people are telling that the dollar rates will decrease in the future. As the recession started in 2007 and now it is prevailing in Europe, the investors are showing interest towards gold. America is considered as the world finance energy and now as the America is decreasing its influence, the dollar rate decreases. Generally all the countries store their money in the form of dollars. Now few countries are investing their money in gold as the dollar is going to decrease. Other reason for the increase in gold rates is the decrease in its usage. And the usage of gold is decreasing 5% every year.

Is there an increase of gold rate in future?

There is an opportunity for increase in gold rate whether we see in the fundamentals or technical. As the financial support is strong in India and so the gold usage is more here. Now china is also looking forward to invest in gold business. The gold rate is also increasing as the currency rates are increasing and the re-rating is less in the case of gold. In the last 30 years, the rates of other things had increased but the gold rate did not increase. Experts are telling that there will be increase in the rate of gold but they are not able to tell the exact rate.

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